At the beginning of the year 2012, the shareholders' equity section of the statement of financial position of Ponti Corporation reflected the following:

On February 1, 2012, the board of directors declared a 100 percent stock dividend to be issued on April 30, 2012. The price per common share was \(\$ 18\) on February 1.
\section*{Required:}
1. For comparative purposes, prepare the shareholders' equity section of the statement of financial position

(a) before the stock dividend and

(b) after the stock dividend. (Hint: Use two columns to shows amounts for this requirement.)
2. Explain the effects of this stock dividend on assets, liabilities, and shareholders' equity.

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Common shares, no par value, authorized unlimited number of shares, issued and outstanding 36,000 shares Retained eamings $360,000 750,000